We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bearish
Gold
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Bitcoin
Mixed
More View more
Real Time News
  • What are the Market cycles? How are #currencies impacted in these cycles? How can these cycles impact #forextrading patterns? Find out here: https://t.co/ckr2fUOWqW https://t.co/OlWS2GLtjb
  • Commodities Update: As of 08:00, these are your best and worst performers based on the London trading schedule: Silver: 0.78% Gold: 0.42% Oil - US Crude: -1.08% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/GVZUxbwFHZ
  • Forex Update: As of 08:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: 0.44% 🇨🇭CHF: 0.42% 🇯🇵JPY: 0.37% 🇳🇿NZD: 0.26% 🇬🇧GBP: 0.10% 🇨🇦CAD: -0.08% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/jHAHL6TLIY
  • Popular carry play: $EURMXN. Reminder that non-commercials and asset managers had been holding near record longs in $MXN, leaving the currency vulnerable to a deeper pullback as risk appetite sours https://t.co/UcxpPFnQb1
  • #Euro May Fall on Eurozone Confidence Data as #COVID-19 Spreads https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/euro_open/2020/02/27/Euro-May-Fall-on-Eurozone-Confidence-Data-as-COVID-19-Spreads.html
  • Indices Update: As of 08:00, these are your best and worst performers based on the London trading schedule: Wall Street: -0.83% US 500: -0.87% France 40: -1.98% Germany 30: -2.12% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/qdKxJadnUE
  • Carry unwind lifting $EURUSD above 1.09, eyes on notable option expiries - 1.0900 (632mln), 1.0915-25 (1.2bln), 1.0955 (1bln)
  • Central bank independence has several advantages and disadvantages. Find out what they are in-depth with @MartinSEssex here: https://t.co/wVFXbbTxf1 https://t.co/SbDPHN0Win
  • European Opening Calls From IG #FTSE 6870 -2.45% #DAX 12451 -2.54% #CAC 5544 -2.47% #AEX 566 -2.74% #MIB 22818 -2.58% #IBEX 9107 -2.25% #OMX 1743 -2.20% #STOXX 3486 -2.56%
  • Hey, traders 👋 do you want live AMAS with our analysts, market updates and tools to improve your trading strategy? Join us now on Instagram! 👉 https://t.co/pHGzVMqsC4 https://t.co/XYs6c4iBWw
Dow Jones, S&P 500 Price Outlook: Will Tech Continue the Rally?

Dow Jones, S&P 500 Price Outlook: Will Tech Continue the Rally?

2019-05-03 20:40:00
Peter Hanks, Junior Analyst
Share:

Dow Jones, S&P 500 Price Outlook:

  • The technology sector has climbed considerably in the year to date, dragging US indices higher
  • The sector’s strength can be seen in the disparity between the Dow Jones and the Nasdaq, with the latter pressing to record highs before the former was able to even test prior levels
  • For traders hoping the rally will continue, healthcare could be a sector ripe for medium-term gains

Dow Jones, S&P 500 Price Outlook: Will Tech Continue the Rally?

With the majority of big-tech earnings for the season behind us, the market has a good grasp on what to expect in the coming quarter. An earnings beat from Apple saw them recapture the $1 trillion mark, while Google’s miss saw its market cap fall by $85 billion in a day. Still, tech remains the one sector to stand atop the rest - as it has during much of the decade-long bull run.

At current valuations, some market participants have begun to call the top. For those on the other side of the argument, will they continue to pile into technology stocks? Or will they venture into other sectors in an attempt to prolong the run?

Tech Remains on Top

S&P 500 sector returns

With a year-to-date return of roughly 23%, the tech sector is responsible for a significant portion of the recovery rally from December. Consumer discretionary and industrials are two other notable performers, offering returns of 19% and 18% respectively. On the other hand, sectors that are typically more defensive like utilities, energy, and healthcare unsurprisingly lag the broader S&P 500.

However, healthcare has offered particularly poor returns – battling calls for free universal healthcare in early and mid April. The discussions in Washington pressured the sector to forfeit most of its progress in the recovery rally. With that in mind, the sector could be ripe for outperformance in the coming weeks. Although the calls for healthcare reform will remain for some time as election season progresses, the initial shock to the sector may have been weathered.

Dow Jones, S&P 500 Price Outlook: Will Tech Continue the Rally?

The potential outperformance comes with a caveat - investors must be willing to accept the political risk associated with the sector, a tall task. But as election season unfolds, and frontrunners emerge, the likelihood of reform will likely be easier to forecast – and to reflect in pricing.

Alongside the political risk, investor confidence in the sector is questionable. The Healthcare XLV ETF notched its second largest intraday outflow over the last year on Thursday, suggesting investors were either content to take profit from last week’s recovery – or the risk at the current valuation was too high for investors to stomach.

S&P 500 sector weights

Either way, healthcare makes up a sizable portion of the S&P 500. As the second largest sector, healthcare is responsible for 13.76% of the Index – compared to 21.71% for tech and 12.29% for third place financials. If investors are looking for a particular sector to watch if the rally is to continue, healthcare may be one to watch.

--Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

Read more:Stock Market Update: Retailers Warn of Impact from Strong US Dollar

DailyFX forecasts on a variety of currencies such as the US Dollar or the Euro are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.